South Florida has the most competitive rental market

Relief may be on the horizon this year

South Florida’s rental markets were some of the hottest in the country in 2023 — and while that will likely remain true for 2024, renters and buyers should have better luck this year than in previous years.

Miami-Dade and Broward counties received high rental “competitiveness scores” in recent data by RentCafe, with the Miami market being the hottest rental market in the nation. Broward came in at No. 7.

The score is determined by a combination of these factors:

„ Average vacant days, or vacancy rate, which counts the number of days an available unit is on the market.

„ Occupancy rate, which is how many units are occupied versus those that are not.

„ Prospective renters, which is the average number of prospective tenants who have applied for or inquired about an available unit.

„ Lease renewal rate, which is how many people choose to renew or extend their existing lease.

Melissa Hoff, a broker associate with Compass, a real estate company with agents across South Florida, defined competitiveness in a rental market in simple terms.

“There are more people that are looking at the same unit than there are units available,” she said. “And while there are a lot of new units being built, I believe that there are still a lot of people moving to this market, so there’s still more demand than there is supply.”

“And while there are a lot of new units being built, I believe that there are still a lot of people moving to this market, so there’s still more demand than there is supply.”

— Melissa Hoff, a broker associate with Compass

But a few factors may arise this year creating more favorable market conditions, providing a shred of relief for renters and buyers alike

Election years typically correlate with lower interest rates, which are already declining, Hoff said.

“It’s a good time to start looking and figure out where you want to buy,” she said.

Hoff said she thinks the rates drop a few times, which will incentivize

current renters to buy.

“People still want to purchase, they’re just waiting for the right time, and some of them have been sitting on the sidelines for the past couple of years, and they’re sick of it,” she said. “They’re ready to make that move.”

South Florida still does not have a lot of inventory to offer renters and buyers, whether they already live in the region and want to move locally or are migrating from across the country, but Hoff said with interest rates dropping, inventory will begin picking up, which will give people more options to choose from.

Ken H. Johnson, a real estate economist who also works for Florida Atlantic University’s College of Business, agrees people will have more options this year than did last year and even the year before in 2022.

Rent and home costs are still very high, he said, but they also are not projected to dramatically rise, either, a finding Johnson determined through and illustrated by FAU’s Waller, Weeks and Johnson Rental Index.

“We’re trying to catch up,” he said. “We’re just not there yet.”

One trend working against the hope of having South Florida’s supply meet the demand is the short-term rental market, Johnson said.

“The whole tri-county area here is an area that people love to come and visit. So we keep losing units, homes and apartments and condos to short-term rental type situations,” he said, “Even though we’re building, even some of those are coming out and landing on the short-term rental inventory list.”

But overall, Johnson and Hoff agree: The prospects for renters and homebuyers for this year are positive.

Terms between landlords and tenants may become more fair as the rental market gradually cools, Johnson said, and overall, both homebuyers and renters may have more opportunities to choose from when looking for a new place to live.

And for those looking for the most affordable markets in South Florida, consider consulting the Sun Sentinel’s analysis of the least and most affordable markets.

“It’s going be a better year than last year for homeownership and for renting in Florida,” Johnson said.